A tax saver, an investment, a life cover. Most Indians buy life insurance for these three purposes—and in this order. Like many financial decisions, this one is both right and wrong.
The purposes are right, but the sequence is wrong. Life insurance is for life cover first, investment second and tax saving after that. But that’s not all. Like most things in life, the range of insurance policies is increasing far beyond our comprehension. From pure life cover to estate planning, there are plans to fulfil each or all these needs.
Given the plethora of insurance products available, making the choice becomes more difficult. But it’s a choice you have to make. And you’ve probably made it.
The popularity of life insurance among Indian households (second only to bank deposits) is part of investment folklore. More than 16 crore lives covered and still counting.
But how many of these have a policy that’s right and adequate? Sadly, too few. Your life insurance may be wrong because it doesn’t meet your needs, or the cover is inadequate, or the premium is too high.
And given its wealth-creation potential, you can no longer afford to buy any traditional insurance policy in March merely for tax planning.
More confused than comforted? That’s why you have this special issue of MONEY TODAY. Browse your way to a comprehensive guide that shows how you can benefit from your life cover in this lifetime.
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